The invention disclosed herein relates generally to systems and methods for describing valuable items. More particularly, the invention relates to data processing systems and methods for appraising and otherwise evaluating the value of and describing jewelry and other items, and for providing information relating to such items for use in analyzing insurance underwriting, claims analysis, and similar issues.
In the buying, selling, and insuring of valuable items of personal property such as jewelry, gemstones, antiques, fine china, collectibles and the like, the need for accurate appraisal frequently arises. Wide variations in legitimate value exist for what might seem to be similar items, leaving the untrained observer completely at a loss to estimate value accurately. Moreover, sellers and appraisers of such valuables sometime deliberately obscure faults, flaws, or other negative aspects, and disclose only as much information regarding the items they describe as they must. In the buying and selling of personal valuables the doctrine of caveat emptor applies vigorously.
For similar reasons insurance companies and other underwriters of valuable items of personal property must proceed cautiously in assessing the value of items for which they may be asked to write polices or evaluate claims.
It is often difficult or impossible, however, to obtain accurate appraisals for particular items at reasonable cost. The jewelry, gemstone, antique, and collectibles industries tend to be insular and closed, and the assessment of pieces an arcane or esoteric exercise. The cost of paying a knowledgeable individual to provide a reliable evaluation has tended to be so high as to preclude buyers and insurers from seeking the high-quality, detailed appraisals they need.
For example, many jewelry items are fairly valued at $10,000 or less. While this value is high enough to warrant explicit listing in insurance coverage schedules, and prudence in selecting an item for purchase, it is not generally high enough to warrant a detailed professional appraisal, prepared by a trained appraiser, which can easily cost several hundred dollars. This is particularly true from the standpoint of the insurer, who can expect to recover only small amounts in annual premiums for insured items.
Additional difficulties arise with the quality of appraisal methods. Traditionally appraisals have been conducted by the “bill of materials” method, in which a value is assessed purely on an aggregation of the values of the individual parts of a piece, by determining a value for each of the parts, based only on value by weight of the materials, weight, cut, etc., used, and adding the individual values together, with no consideration given to workmanship, source, or other less tangible factors. For example, a ring of exquisite craftsmanship, and therefore extraordinary value, assessed by the “bill of materials” approach would almost certainly be significantly undervalued.
Thus buyers have been sometimes tended to take substantial risks in making purchases, and insurance companies have been placed at risk of either substantially overcharging policyholders (and therefore losing business) or losing money on claims for underinsured properties.
Other problems related to assessment methods exist as well. For example, insurers and underwriters have long needed a low-cost, quick, reliable, and preferably automatic method and system for making appraisals, and for recalculating values or appraisals on demand—as for example at the time of a loss; or on a periodic basis, as for example at the expiration or renewal of a policy period. The value of gemstones and other valuables can fluctuate wildly from year to year, depending upon the availability and popularity of particular items. For example, several years ago blue topaz was fashionable and quite valuable. Then a process was developed for manufacturing good quality, good color topaz by irradiation, and the price fell to about $1 per carat. Similarly, several years ago the price of tanzanite was quite high, due to floods at the source in Africa which made mines inaccessible; but now the mines have been restored and the value has returned to former levels. The sheer variety of types and sizes of stones makes complicates assessments also. For example, there are probably 10,000 varieties of diamonds; the price of one particular variety of which, at one particular time, past or present, a claims adjuster needs in evaluating a particular loss.
Insurers and underwriters have also long needed an effective and efficient means for evaluating the accuracy and value of appraisals based on incomplete descriptions, and for completing the appraisals in the most useful, meaningful form possible. Traditionally appraisals received by insurers and underwriters for evaluating property for policies, etc., have tended to be incomplete, and to contain large proportions of information of dubious quality; but there has been no way for the insurer or underwriter to complete descriptions to provide meaningful appraisals, or to know how to intelligently use an appraisal which has been attempted on incomplete data. Having no alternatives, insurers and underwriters have been required to use such appraisals as is, as if full faith in the quality of the appraisal was warranted, with obvious effects on the quality of the policies and potentially disastrous effects on profit margins. It would be extremely beneficial to provide underwriters and insurers with some means of completing descriptions upon which appraisals are based, and of evaluating the quality of appraisals based on incomplete data.
Thus there exists and has long existed a need for a need for a low-cost, reliable system and method for appraising jewelry, gemstones, antiques, and other valuables, useable both for the evaluation of purchases and in the creation and underwriting of insurance policies for such items; and for evaluating insurance or other claims related to such items. There is also a need, particularly among insurers and underwriters, for such a system which provides a quick but reasonably accurate estimate of the value of such items at a given selected time, optionally with incomplete description data. There is a further need for methods and systems for quickly, reliably, and efficiently completing incomplete appraisals, and for evaluating the quality of the appraisals themselves, particularly when based on incomplete descriptions.